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Almadex Minerals Ltd (2)
Symbol C : DEX
Shares Issued 55,094,969
Close 2019-05-14 C$ 0.305
Recent Sedar Documents

Almaden to borrow up to 1,597 oz of Au from Almadex

2019-05-14 16:23 ET - News Release

See News Release (C-AMM) Almaden Minerals Ltd

Mr. Duane Poliquin of Almaden reports

ALMADEX MINERALS LTD. ENTERS INTO SECURED GOLD LOAN AGREEMENT WITH ALMADEN MINERALS LTD.

Almaden Minerals Ltd. has entered into a secured gold loan agreement with Almadex Minerals Ltd., pursuant to which Almadex has agreed to loan up to 1,597 ounces of gold to Almaden. The approximate value of this gold is $2-million (U.S.).

Under the terms of the gold loan, Almaden will be entitled to draw down the gold in minimum 400-ounce tranches. At any given time, the amount of gold ounces drawn multiplied by the London Bullion Market Association (LBMA) AM gold price in United States dollars, plus any accrued interest or unpaid fees, shall constitute the loan value.

The maturity date for the gold loan is March 31, 2024, and can be extended by two years at the discretion of the borrower. Repayment of the loan value shall be made either through delivery of that amount of gold drawn, or through the issuance of shares of the borrower, according to the lender's preference. Mandatory prepayment shall be required in the event that the borrower's Ixtaca gold-silver project located in Puebla state, Mexico, enters into commercial production during the term, requiring the borrower to deliver 100 gold ounces per month to the lender. In addition, the borrower has the right to prepay the loan value at any time without penalty, in either gold or shares as chosen by the lender, and the lender has the right to convert the loan value into shares at any time during the term.

The interest rate of the gold loan is 10 per cent of the loan value per annum, paid in arrears. Interest payments can either be accrued to the loan value, or paid by the borrower in cash or gold. A standby fee of 1 per cent per annum shall apply to any undrawn amount on the gold loan. In addition, Almaden has agreed to issue Almadex 500,000 transferable share purchase warrants, with an exercise price of $1.50 per share and expiry date of May 14, 2024, as an arrangement fee.

Security for the loan is certain equipment related to the Rock Creek mill (see Almaden press release of Oct. 19, 2015), which is not required for the Ixtaca project. The gold loan includes industry-standard provisions in the event of default, material breach and change of control. The Toronto Stock Exchange has conditionally approved the listing of the common shares issuable upon exercise of the warrants and the shares issuable pursuant to the gold loan. The listing is subject to Almaden fulfilling all of the listing requirements of the TSX on or before June 14, 2019.

Duane Poliquin, chairman of both Almaden and Almadex, stated: "This gold loan provides Almaden with a non-dilutive means to continue advancing Ixtaca through permitting, while also commercializing a latent financial asset held by Almadex. We are pleased to be in a position to advance Ixtaca in this manner, the success of which will benefit both Almaden and Almadex shareholders, given Almadex's 2-per-cent NSR [net smelter return] royalty on the project."

About Almaden Minerals Ltd.

Almaden Minerals owns 100 per cent of the Ixtaca project, subject to a 2-per-cent NSR royalty held by Almadex Minerals. The Ixtaca project was discovered by Almaden in 2010.

About Almadex Minerals Ltd.

Almadex Minerals is an exploration company that holds a large mineral portfolio comprising projects and NSR royalties in Canada, the United States and Mexico. This portfolio is the direct result of over 35 years of prospecting and deal-making by Almadex's management team.

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